12Month11On the day, the theory edition of the People's Daily published an article signed by Liu Mingzhong, Chairman and Secretary of the Party Committee of the Group,The title is: "Accelerate Development Through the Improvement of the Modern Enterprise System".

The article is based on the implementation ofThe spirit of the 18th Plenary Session of the 18th Central Committee of the Communist Party of China on "promoting state-owned enterprises to improve the modern enterprise system, giving play to the leading role of the state-owned economy, and continuously enhancing the vitality, control, and influence of the state-owned economy," combined with the group's more than ten years of positive exploration experience in improving the corporate governance structure, highlighting strategic leadership, improving the budget management system, and optimizing internal management, expounds the view that "under the conditions of the socialist market economy, state-owned enterprises can only achieve sustainable and healthy development by accelerating the improvement of the modern enterprise system and becoming legal entities and competitive entities that meet market requirements".

It is understood that the theoretical edition of the People's Daily is the most important section of the People's Daily. It is currently an authoritative window for scholars and leaders at or above the provincial and ministerial levels to offer advice and suggestions. The publication of the article marks the affirmation of the reform and development experience of the Group by the Central Committee of the Communist Party of China.

The following is the full text of the article:

Achieving Accelerated Development Through the Improvement of the Modern Enterprise System

Liu Mingzhong

The Decision of the Third Plenary Session of the Eighteenth Central Committee of the Communist Party of China proposes to promote state-owned enterprises to improve the modern enterprise system, give play to the leading role of the state-owned economy, and continuously enhance the vitality, control, and influence of the state-owned economy. This is a summary and improvement of the experience of state-owned enterprise reform, and it is also the overall requirement for deepening the reform of state-owned enterprises. Under the conditions of the socialist market economy, state-owned enterprises can only achieve sustainable and healthy development by accelerating the improvement of the modern enterprise system and becoming legal entities and competitive entities that meet market requirements. Focusing on the formation of a sound modern enterprise system, Xinxing Jihua Group Co., Ltd. (hereinafter referred to as "Xinxing Jihua Group") actively explores and promotes the "four-in-one" model of comprehensive development of the enterprise system, strategic control, operating mechanism, and humanistic regulation, which has stimulated development vitality and achieved rapid development.

　　Improve the Corporate Governance Structure and Stimulate the Vitality of Enterprise Development

　　The Decision proposes to improve the corporate governance structure that operates in coordination and effectively checks and balances. State-owned enterprises can only form a scientific and effective decision-making and operation mechanism where owners, operators, and laborers both motivate and check and balance each other by improving the corporate governance structure, so that the rights of the three parties are protected and their behaviors are constrained. Xinxing Jihua Group has been2005Since being designated by the State-owned Assets Supervision and Administration Commission as a central enterprise for board of directors pilot projects, starting with the establishment of a standardized board of directors system, it has initially explored a corporate leadership system that combines the "authorization based on production, effective checks and balances" of the corporate governance structure with the "people-oriented, overall balance" of the party organization system.

　　With the standardized construction of the board of directors as the core, the "three responsibilities co-establishment" of decision-making, execution, and supervision is realized. Based on the company's articles of association, formulate20basic governance systems,17internal control systems, and according to the principle of "three responsibilities co-establishment" of decision-making, execution, and supervision, the responsibilities and powers of the board of directors and the management team are clearly defined to ensure standardized operation. The board of directors mainly exercises the power to grasp the direction of enterprise development, formulate development strategies and target plans, approve enterprise investment and financing proposals and major projects, etc., the management team exercises the power to implement relevant resolutions of the board of directors, ensure the implementation of annual budget plans and medium- and long-term plans, etc., and actively supports and cooperates with the work of the supervisory board of the State Council stationed in the group, forming a leadership pattern with clear responsibilities, each responsible, coordinated operation, effective checks and balances, and common promotion of development, ensuring the preservation and appreciation of state-owned assets.

　　With the role of external directors as the key, the "three wisdoms integration" of external directors, internal directors, and executive directors is realized. Adhering to the unity of scientific decision-making and democratic decision-making, giving full play to the role of external directors as "teachers in operation, experts in decision-making, and bridges in communication," and implementing the "one-vote veto" system for external directors. Giving play to the role of employee directors as a link between the leadership and the broad masses of employees, enabling them to concentrate on reflecting the wishes and demands of the masses of employees in decision-making and supervision, and ensuring the interests of employees.

　　With the communication and coordination of the leadership team meeting as the platform, the "three horses driving together" of the board of directors, the party committee, and the management team is realized. At the governance level, for major issues of the enterprise, the party committee first conducts research to form reference opinions for the board of directors or the general manager's office meeting to make decisions, incorporating the principle of "party organization participation in major decision-making" into the group's business decision-making procedures, and integrating it into the final business decisions. At the management level, the group party committee puts forward work requirements in a timely manner based on the hot, difficult, and key points of business management, mobilizes party and trade union organizations at all levels and party and group members to take the lead in cooperating with business work, ensuring the efficient implementation of board resolutions and the rapid implementation of the management team.

　　With hierarchical decentralization as the basis, the "three-level co-construction" of the group-block-enterprise corporate governance system is realized. Implementing a professional management model, for the subordinate70multiple level-three enterprises are divided into4blocks for management, and the factory system is changed to the company system. A three-level corporate governance system with an external director system as the core is formed, with the headquarters positioned as the strategic center, the secondary block positioned as the business management center, and the tertiary enterprise positioned as the profit and cost center, realizing "authorized governance, decentralized order, authorized chapter, and degree of use" and "decentralization of concentrated power, and publicization of hidden power".

　　Highlight Strategic Leadership and Enhance Innovation-Driven Capabilities

　　Attaching importance to strategic leadership in enterprise development, enabling enterprises to further integrate with the market economy, and better adapt to the new situation of marketization and internationalization, is an inherent requirement for improving the modern enterprise system, and it is also a powerful measure to enhance the vitality, control, and influence of enterprises. As an enterprise group formed through administrative restructuring, Xinxing Jihua Group's business involves multiple fields such as metallurgy and casting, light industry and textiles, equipment manufacturing, real estate, and trade and logistics, with a large industry span and high management difficulty. In order to achieve coordinated development of its subsidiaries, the Group emphasizes strategic leadership and focuses on improving innovation-driven capabilities.

　　Establish an overall strategic leadership system. Form a "group overall strategy—business segment strategy—professional company strategy—member enterprise strategy"4strategic management levels, with the group's overall strategy as the leader, and formulate supporting technological innovation strategies, market marketing strategies, corporate culture strategies, talent-strengthening strategies, international operation strategies, information support strategies, and harmonious and stable strategies at all levels.

　　Establish a strategic rolling adjustment mechanism. According to the path of strategic analysis—strategic positioning—strategic design—strategic decomposition—strategic implementation—strategic evaluation, establish a strategic management system and overall strategy3annual rolling adjustment mechanism. Especially in the strategic design stage, emphasis is placed on forward-looking planning and dynamic adjustments, striving to ensure that various strategies adapt to new changes in the situation in a timely manner.

　　Establish a strategic linkage pattern. In the process of formulating development strategies, widely adopt employee opinions and suggestions, fully mobilize employee enthusiasm and initiative, and form a strategic linkage pattern of "employees protecting teams, teams protecting workshops, and workshops protecting enterprises" cascade linkage and overall linkage. Under this pattern, focusing on strengthening and improving the core main business, actively extending the value chain and industrial chain, promoting enterprise transformation and upgrading, and achieving common development of advantageous products such as cast iron pipes, grating plates, bimetallic pipes, work clothes, and work shoes and boots.

　　Improve the Budget Management System and Enhance the Effectiveness of the Operating Mechanism

　　The "Decision" puts forward clear requirements for state-owned enterprises to adapt to the new situation of market-oriented and internationalization, standardize business decision-making, improve efficiency, and enhance vitality. Focusing on improving market competitiveness and adaptability, Xinxing Jihua Group has gradually explored effective management and operation mechanisms, improving efficiency and benefits.

　　Improve the closed-loop management system of comprehensive budget. Adopting the approach of "enterprise report—block diagnosis—group review—enterprise rectification," it combines the annual budget promotion with the next year's budget preparation, combines grasping key points with grasping routine matters, and combines appraisals with rewards and punishments, forming a comprehensive budget closed-loop management system including a budget indicator system, budget responsibility system, budget tracking system, budget evaluation system, and budget assessment system. It adheres to aligning budget preparation indicators with the excellent level of the industry, requiring all levels of managers to learn about, prepare, and take the lead in implementing the budget, allowing all employees to participate in and approve of the budget, thereby achieving self-management and self-discipline.

　　Explore the "two systems" management mechanism. Guided by market changes, explore building an "internal enterprise simulation legal person operation mechanism" and a "production, supply, and sales rapid linkage response mechanism." The former focuses on reducing costs and increasing efficiency, while the latter focuses on market response, improving enterprise competitiveness both internally and externally.2008Since the year,19The major indicators of iron and steel metallurgy ranked first in the country's peers; overall cost reduction2.3%; the profit per ton of steel remains among the top three in the industry.

　　Optimize internal management and improve incentive and restraint mechanisms

　　Through deepening reforms, strengthening incentives and constraints, developing human resources, and cultivating corporate culture, is an important part of improving the modern enterprise system. Xinxing Jihua Group, combined with reforms of labor, personnel, and distribution systems, continuously improves incentive and restraint mechanisms, realizing the organic unity of rapid development and harmonious stability.

　　Adhere to the principle of both entry and exit, building a talent highland.2006Since the year, personnel system reforms have been implemented starting from the headquarters. The group's chief accountant, chief legal counsel, secondary company heads, and chief accountants of tertiary enterprises are all publicly recruited from society. The headquarters has a total of58management personnel, of which50are from outside the enterprise system, with the proportion of external personnel exceeding86%. Among them, the proportion of external personnel among middle-level cadres reaches85%。

　　Adhere to the principle of both literary and martial arts, activating existing talent. Using the construction of a learning enterprise as a carrier, it in-depthly carries out "five learning" activities, including learning economics, finance, management, technology, and law. It formulates and implements the "Talent Development Plan," focusing on strategic promotion and industrial layout, signing continuing education cooperation agreements with universities such as Tsinghua University, and establishing internship bases with University of Science and Technology Beijing. In recent years, the group alone has held classes for70person-times.3000More person-times.

　　Adhere to the principle of both promotion and demotion, improving incentive mechanisms. Establish a dynamic three-level performance appraisal system, implementing salary incentives linked to contributions to the enterprise and society, forming a whole-staff performance appraisal mechanism of "positions depend on competition, and income depends on contribution," reasonably determining the salary level and job treatment of enterprise managers, and strictly regulating the job consumption and business consumption of managers.

　　Adhere to the principle of both hard and soft power, creating a competitive atmosphere. While grasping salary assessment and incentives, it gives full play to the incentive role of corporate culture's soft power, cultivating a unique corporate culture, and promoting the core concept to "enter the text, enter the heart, and see action" in all member units; conducting inter-enterprise flag-grabbing and competition activities to encourage enterprises, their leadership teams, and employees to strive for first-class achievements.